Credit Suisse‘s Garthwaite: Buy Stocks Until 2020 Recession

Credit Suisse analyst Andrew Garthwaite advises that stocks are your best investment bet now, until a U.S. recession hits the economy in the third quarter of 2020.

"We conclude that a US recession is unlikely until Q3 2020," Garthwaite wrote in a recent note to clients, . "Remain overweight equities."

Garthwaite suggested staying underweight cyclicals like consumer discretionary, materials, and industrials calling the group "expensive and "over-owned," CNBC cited him as saying.

He favors lowly-leveraged defensive sectors like consumer staples, utilities, healthcare and telecoms.

Meanwhile, Credit Suisse isn't alone in its economic warnings.

A surging dollar and a capital flight from emerging markets may lead to another “major” financial crisis, investor George Soros said, warning the European Union that it’s facing an imminent existential threat.

The “termination” of the nuclear deal with Iran and the “destruction” of the transatlantic alliance between the EU and the U.S. are “bound to have a negative effect on the European economy and cause other dislocations,” including a devaluing of emerging-market currencies, Soros said in a speech in Paris on Tuesday,

“We may be heading for another major financial crisis.”

The stark warning from the billionaire money manager comes as Italian bond yields have jumped to multi-year highs and major emerging economies including Turkey and Argentina are struggling to contain the fallout from runaway inflation.

To be sure, the S&P 500 and Dow Jones Industrial Average touched near three-week lows on Tuesday as investors switched cash into perceived safe havens of global financial markets due to a deepening political crisis in Italy,

European financial markets saw a second day of heavy selling due to fear that repeat elections – which now seem inevitable in the euro zone’s third largest economy – may become a de facto referendum on Italian membership of the currency bloc. 

On Monday, Italy’s president set the country on a path to fresh elections by appointing a former International Monetary Fund official as interim prime minister with the task of planning for snap polls and passing the next budget.

European financial markets saw a second day of heavy selling due to fear that repeat elections – which now seem inevitable in the euro zone’s third largest economy – may become a de facto referendum on Italian membership of the currency bloc.

(Newsmax wire services contributed to this report).